Head of the IMF, Christine Lagarde, said she thinks it is inevitable that global regulators come up with new regulations for cryptocurrencies; the IMF has been primarily focused on how the new currencies are being used for money laundering and funding illicit activities; this isn’t the first time the IMF has hinted at and discussed cryptocurrency regulations; trends in the direction of new legislation have been hinted at for some time though nothing widespread has occurred yet. Source.
While some of Europe’s biggest banks will not allow clients to buy cryptocurrencies with credit cards or advise on investing in the market, the smaller banks see an opportunity; Vontobel, Falcon Bank and Bank Frick have all agreed to handle cryptocurrency investments on behalf of clients; “There are risks involved but there are also really big opportunities,” Edi Wögerer, chief executive of Bank Frick, told the Financial Times; some of the world biggest banks have said the market is too risky with volatile prices and money laundering concerns; with the potential for more regulation these smaller banks are looking to already stake a place in the market before the bigger firms feel comfortable enough to get involved. Source.
The UK recently visited China on a trade mission and signed a number of fintech deals worth more than $1.8bn; the deals are looking to create a deeper partnership between the nations and potentially create more than 850 jobs; deals include Innovate Finance and NIFA's memorandum of understanding, CurrencyCloud and X-Transfer's partnership and UK fintech R5FX's collaboration with Shanghai Clearing House. Source.
The UK fintech sector has shaken off the worries of Brexit to take in the second highest amount of capital from VC’s in 2017; they have overtaken China and only trail the US in terms of VC funding; according to data from Innovate Finance UK fintech investment was up 153 percent in 2017 from the year earlier; 24 per cent went into challenger banks, 21 percent into money transfer and foreign exchange, 17 percent into alternative lending and financing and 11 percent into personal finance/wealth management; VC investment globally reached $14.4bn across 1,824 deals, representing an 18 per cent decrease from 2016. Source.
Christine Farnish, the chair of the P2PFA for the past five years, is stepping down and is being replace by Paul Smee. Source
Monzo has grown its customer base over five times in one year and used different methods that help keep that base coming back; they ask for community feedback, open the company for equity crowdfunding rounds so users can invest and they host small, intimate events; 80 percent of their growth is word of mouth, the remaining 20 percent is through ads on Facebook and Twitter; “The biggest challenge is that we’re growing very fast — our customer and employee numbers are growing fast — we want to keep the customer focus, how we operate a transparent customer growth approach, and how we do that at scale,” as Tristan Thomas, Monzo’s head of marketing and community, tells TearSheet. Source.
Lloyd’s Banking Group and Virgin Money recently banned customers from using their credit cards to buy cryptocurrencies; customers will still be able to use their debit cards to buy cryptocurrencies but for fear they could go into debt they do not want credit cards being used; other card issuers like Barclays and Mastercard say they are reviewing the crypto space but no decisions have been made. Source.
Prime Minister Theresa May announced the start of the R5-SHCH Connect Partnership between London and China; the partnership will allow banks in China to have access to London’s foreign exchange market; the partnership is between London's R5 and the Shanghai Clearing House; companies involved include HSBC, LSE, BP, Standard Chartered and Standard Life Aberdeen; Jon Vollemaere, CEO of R5 commented to Finextra, “The new service offers benefits for all institutions trading FX. It provides Chinese banks with increased access to the global FX market, it enhances liquidity in major currencies, and it advances the internationalisation of the RMB.” Source.
European finance chiefs believe that tech companies moving into financial services is a threat to financial stability; they also highlight the need for companies to be held to the same regulation as big banks; banks are especially concerned as open banking regulations are now in effect; article shares perspectives from BBVA, ING and Lloyds. Source
Robo-advisors are far less prevalent in Europe compared to the US; however this is a growing market particularly in the UK and Germany; the UK market is larger, but Germany is growing at a faster rate; total assets under management stand at $3.5 billion at the end of 2017 according to TechFluence; it is estimated that there are around 98-126 robo-advisor services in Europe; article shares the biggest robo-advisors in Europe and the major differences between markets. Source